Due to potential problems with the development of ancillary activities, the American Bar Association adopted Rule 5.7 of the Model Rules of Professional Conduct in the mid-1990s. This rule provides that law firms and secondary companies cannot do joint advertising with non-lawyer owners, and prohibits law firms from sharing legal fees with non-lawyers. In addition, lawyers must inform clients that solicitor-client privilege does not extend to services and transactions made by ancillary transactions. The clearest type of consideration that meets the first requirement is an employer`s promise to provide an employee with confidential information or trade secrets in exchange for the employee`s commitment not to disclose that information. Light, 883 S.W.2d to 647 fn. 14. “[B] goodwill and confidential or proprietary information factories” are examples of interests that justify protection by a non-competitive confederation. Sheshunoff, 209 S.W.3d with 649. See also Curtis v. Ziff Energy Group, Ltd., 12 S. 3d 114, 118 (Tex).
App.-Houston [14th Dist.] 1999, no pet.) (the establishment of a non-competition clause for an otherwise enforceable agreement, where “the federal state was intended not to compete with the employee`s thinking, not to disclose or use confidential information or post-employment trade secrets”); Ireland, 950 P.W.2d to 158 (The finding of a non-compete clause for an otherwise enforceable agreement in which “confederation, not to compete, was intended to enforce, not disclose or use the worker`s recital . . . . Business Secrets”). In Light, the Texas Supreme Court held that a waiver is an otherwise enforceable “part-time” agreement at the time of arrest, where: (a) the consideration invoked by the employer in that agreement justifies the employer`s interest in being able to dissuple the competition worker; and b) the Confederation must impose the consideration or promise of the worker`s return in this agreement. Light, 883 S.W.2d to 647 The Merriam Webster Dictionary defines the word “ancillary” as subordinate, subsidiary or complementary. In a way, ancillary enterprises supplement the revenues and activities of primary enterprises. However, secondary companies have also caused some controversy, even prompting limited legal action from the American Bar Association, a national body responsible for overseeing the legal profession. After Light, the courts questioned whether the employer should provide the worker with the confidential information at the time the worker signed the non-competition agreement in order to enforce the agreement.
In 2006, the Texas Supreme Court resolved this issue in a pro-enforcement manner. He noted that non-competition clauses can be considered unilateral contracts entered into at the time of signing a non-competition clause that become mandatory as soon as an employer provides confidential information to the worker. Sheshunoff, 209 S.W.3d with 651. Sheshunoff rejected 15.50`s interpretation that the non-competition contract must be supported by a valid promise and effective benefit at the time of the agreement. Under Sheshunoff, employers can impose non-competition bans, even if they only make confidential information available to the worker days, weeks, months or even years after the agreements are implemented.